The municipality is providing $300,000 to help the Whistler legacies society start up at new restaurant at Cheakamus Crossing.
As the landlords of the 3,000 square foot space, the municipality is putting up the money as a tenant inducement.
In its first public opportunity to debate the deal, council quietly passed the resolution at Tuesday's meeting. Councillors Eckhard Zeidler, Ralph Forsyth and Grant Lamont voted in opposition.
The Whistler 2010 Sport Legacies Society, which runs the sliding centre, Nordic centre and athletes' centre, will operate the new restaurant in partnership with the Bearfoot Bistro - a deal that was struck after a lengthy search for a tenant before the 2010 Games was unsuccessful.
But Richard Auer, who ran Grass Roots Pizza in the village, said the deal isn't fair.
He was interested in the Cheakamus spot about a year ago. He said a $300,000 inducement had been on the table when he was in discussions for the space that could have changed the whole deal. It didn't. And Auer walked away from the opportunity.
"If we would have all known that there was $300,000, there would have been way more interest in the space," said Auer.
"It would have changed the whole bid and I think it's very unfair that now, because they didn't find anybody, now they're saying 'OK we're just going to throw some money at it and let's run with that and see what happens."
He put together a proposal, and though some tenant inducements were offered in the counter proposal, it was nowhere close to the inducements for the legacies society.
But Pat Kelly, owner of the Whistler Real Estate Company, who was trying to seal a deal for the Whistler 2020 Development Corporation (WDC) before the Games, said his mandate was that any opportunity was on the table. The WDC is the municipal subsidiary that was responsible for building the 2010 athletes' village, including this commercial space. The commercial space has since transferred to the municipality.
"Certainly I had a mandate to encourage people if they wanted tenant inducements, if they wanted free rent, if they wanted a number of particularly tenant favourable conditions to say 'let's write it up and see what the board of the WDC says.'"
An inducement in commercial leasing is not unusual, added Kelly.
"Most commercial landlords, for the right tenant, will provide a tenant inducement," he said. "That's not an unusual factor in a lease.
"There's always a tenant inducement of some sort in just about any commercial situation in order to get the right tenant, particularly someone that can be defined as an anchor tenant."
One of the inducements offered at that time was a year's free rent, he said, as an example.
It is not clear how much the municipality is charging the legacies society for rent.
Kelly also pointed out that there is significant risk involved. The Bearfoot was awarded the catering contract for the legacy venues so the restaurant business will be buffered by those contracts.
At the same time, this is a 3,000 square foot space that required significant leasehold improvements to get it operational, said Kelly.
In addition to the $300,000 in municipal money, the legacies society is coming to the table with $400,000 for start-up costs.
"There's some significant risk in the deal and I think a lot of the restaurateurs who looked at it decided the risk was far too great for them," said Kelly.
Auer said the deal is symptomatic of general business at municipal hall.
"It's just a reflection of how things have gone in the municipality in the last few years," said Auer. "They were just not upfront."
The municipality's $300,000 will come from the two per cent hotel tax, which is now known as the Additional Hotel Room Tax (AHRT). An additional $107,000 will also come out of the hotel tax to fund the start up of the rest of the commercial units at Cheakamus. That money will be used to pay for strata fees, utilities and property taxes for the units. There are six units in total - four larger spaces with window fronts and two smaller spaces behind. The restaurant will take up two spaces.
Council also approved a lease with the legacies society Tuesday, allowing it to rent the High Performance Centre and Athletes' Lodge in the Cheakamus neighbourhood. Originally the society was to own the buildings but they have since been transferred into municipal hands, allowing the municipality to protect its investment in the event that the society goes bankrupt.